Natural justice in eligibility certificate claims requires disclosure of adverse material and a fair opportunity to rebut it.

Eligibility for a certificate under rule 3(66a) of the Bengal Sales Tax Rules, 1941 depended on verification of the purchase and installation of plant and machinery and the existence of the supplier at the relevant time. Bank payment by cheque was not conclusive proof of genuineness. However, the adverse local enquiry report relied on for rejection was not furnished to the applicants, and they were denied a fair opportunity to meet it. That violation of natural justice required the rejection orders to be set aside and the matter remanded for fresh consideration after an effective hearing, without granting the certificate outright.

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Issues: Whether the rejection of the application for eligibility certificate under rule 3(66a) of the Bengal Sales Tax Rules, 1941 could be sustained when the genuineness of the purchase of plant and machinery was disputed on the basis of a local enquiry report that was not furnished to the applicants, and whether the matter required remand for fresh disposal after giving an effective opportunity of hearing.

Analysis: Eligibility for the certificate depended on a factual verification of the purchase and installation of plant and machinery and the existence of the supplier at the relevant time. The direct payment made by the bank through cheque was not treated as conclusive proof of genuineness. At the same time, the adverse enquiry report on which the rejection was founded was not brought on record, and the applicants were not given a sufficient opportunity to meet and rebut its contents. The resulting procedure was held to be inconsistent with the requirements of natural justice. The factual questions concerning the bank payments and the genuineness of the purchases therefore had to be re-examined on evidence after affording the applicants a proper hearing.

Conclusion: The rejection orders were set aside and the matter was remanded to the Assistant Commissioner for fresh consideration in accordance with law after giving the applicants an opportunity of hearing. The applicants succeeded only to that extent and were not granted the eligibility certificate outright.

Ratio Decidendi: An adverse factual conclusion affecting statutory entitlement cannot be sustained where the material relied upon is withheld from the affected party and the party is denied a fair opportunity to rebut it; in such a case, the matter must be reconsidered after compliance with natural justice.

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